CERTIFICATE OF AMENDMENT
TO THE
RESTATED CERTIFICATE OF INCORPORATION
OF
CYGNE DESIGNS, INC.
* * * *
The undersigned officer of Cygne Designs, Inc. (hereinafter the
"Corporation"), a corporation organized and existing under and by virtue of the
General Corporation Law of the State of Delaware, does hereby certify:
FIRST: The name of the Corporation is Cygne Designs, Inc.
SECOND: The Restated Certificate of Incorporation of the Corporation is
hereby amended by inserting the following new Article:
XI. Limitation on Transfer of Shares. Except as expressly provided
below in this Article XI, shares of capital stock of the Corporation are fully
and freely transferable.
A. Certain Transfers Prohibited.
(i) No individual, partnership, firm, corporation, association, trust,
unincorporated organization or other entity, as well as any syndicate or
group deemed to be a person under Section 14(d)(2) of the Securities
Exchange Act of 1934, as amended (each a "Person"), who (i) purports to
purchase or acquire any shares of capital stock of the Corporation from the
Corporation by the exercise of a warrant or option or otherwise or (ii)
beneficially owns directly or through attribution (as determined under
Section 382 of the Internal Revenue Code of 1986, as amended (the "Code"))
five percent or more of the value of the outstanding shares of capital
stock of the Corporation or who, upon the acquisition of any shares of
capital stock of the Corporation, would beneficially own directly or
through attribution (as determined under Code Section 382) five percent or
more of the value of the outstanding shares of capital stock of the
Corporation (each such Person described in (i) or (ii) above being a
"Restricted Holder"), shall sell, transfer, or dispose, or purchase or
acquire in any manner whatsoever, whether voluntarily or involuntarily, by
operation of law or otherwise (any such sale, transfer, disposition,
purchase, acquisition or contract being a "Transfer"), any shares of
capital stock of the Corporation or any option, warrant or other right to
purchase or acquire capital stock of the Corporation (such warrant, option,
or security being an "Option") or any securities convertible into or
exchangeable for capital stock of the Corporation, except as authorized
pursuant to this Article XI. For purposes of this Article XI, "capital
stock" shall include the Common Stock and the Preferred Stock of the
Corporation and any Option. Notwithstanding the preceding sentence, for
purposes of determining whether a
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Person owns five percent or more of the value of the outstanding shares of
capital stock of the Corporation, Options shall be taken into account to
the extent taking such Options into account would cause a Person to become
a Restricted Holder. Notwithstanding the provisions of this clause (i),
nothing herein shall prohibit the acquisition or disposition by Bernard
Manuel of any capital stock.
(ii) The restrictions contained in this Article XI are for the purpose
of reducing the risk that any change in stock ownership may jeopardize the
preservation of the Corporation's federal, state and local income tax
attributes. In connection therewith, and to provide for the effective
policing of these provisions, a Restricted Holder who proposes to Transfer
shares of capital stock shall, prior to the date of the proposed Transfer,
request in writing (a "Request") that the Board of Directors of the
Corporation review the proposed Transfer and authorize or not authorize the
proposed Transfer pursuant to subsection C hereof. A Request shall be
mailed or delivered to the President of the Corporation at the
Corporation's principal place of business or telecopied to the
Corporation's telecopier number at its principal place of business. Such
Request shall be deemed to have been delivered when actually received by
the Corporation. A Request shall include (a) the name, address and
telephone number of the Restricted Holder, (b) a description of the shares
of capital stock proposed to be Transferred by or to the Restricted Holder,
(c) the date on which the proposed Transfer is expected to take place, (d)
the name of the proposed transferor and transferee of the capital stock to
be Transferred by or to the Restricted Holder, and (e) a Request that the
Board of Directors authorize, if appropriate, the Transfer pursuant to
subsection C hereof and inform the Restricted Holder of its determination
regarding the proposed Transfer. If the Restricted Holder seeks to sell or
dispose of shares of capital stock, then, within five business days of
receipt by the President of a Request, a meeting of the Board of Directors
shall be held to determine whether to authorize the proposed Transfer
described in the Request under subsection C hereof. If the Restricted
Holder seeks to purchase or acquire shares of capital stock, at the next
regularly scheduled meeting of the Board of Directors following the fifth
business day after receipt by the President of a Request, the Board of
Directors will meet to determine whether to authorize the proposed Transfer
described in the Request under subsection C hereof. The Board of Directors
shall conclusively determine whether to authorize the proposed Transfer, in
its sole discretion and judgment, and shall immediately cause the
Restricted Holder making the Request to be informed of such determination.
B. Effect of Unauthorized Transfer. Any Transfer attempted to be made in
violation of this Article XI will be null and void. In the event of an attempted
or purported Transfer involving a sale or disposition of capital stock in
violation of this Article XI, the Restricted Holder shall remain the owner of
such shares. In the event of an attempted or purported Transfer involving the
purchase or acquisition by a Restricted Holder in violation of this Article XI,
the Corporation shall be deemed to be the exclusive and irrevocable agent for
the transferor of such capital stock. The Corporation shall be such agent for
the limited purpose of consummating a sale of such shares to a Person who is not
a Restricted Holder (an "eligible transferee"), which may include, without
limitation, the transferor. The record ownership of the subject shares shall
remain in the name of the transferor until the shares have been sold by the
Corporation or its assignee, as agent, to an eligible transferee. The
Corporation shall be entitled to assign its
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agency hereunder to any person or entity including, but not limited to, the
intended transferee of the shares, for the purpose of effecting a permitted sale
of such shares. Neither the Corporation, as agent, nor any assignee of its
agency hereunder, shall be deemed to be a stockholder of the Corporation nor be
entitled to any rights of a stockholder of the Corporation, including, but not
limited to, any right to vote such capital stock or to receive dividends or
liquidating distributions in respect thereof, if any, but the Corporation or its
assignee shall only have the right to sell and transfer such shares on behalf of
and as agent for the transferor to another person or entity; provided, however,
that a Transfer to such other person or entity does not violate the provisions
of this Article XI. The rights to vote and to receive dividends and liquidating
distributions with respect to such shares shall remain with the transferor. The
intended transferee shall not be entitled to any rights of stockholders of the
Corporation, including, but not limited to, the rights to vote or to receive
dividends and liquidating distributions with respect to such shares. In the
event of a permitted sale and transfer, whether by the Corporation or its
assignee, as agent, the proceeds of such sale shall be applied first to
reimburse the Corporation or its assignee for any expenses incurred by the
Corporation acting in its role as the agent for the sale of such shares, second
to the extent of any remaining proceeds, to reimburse the intended transferee
for any payments made to the transferor by such intended transferee for such
shares, and the remainder, if any, to the original transferor.
C. Authorization of Transfer of Capital Stock by a Restricted Holder. The
Board of Directors may authorize a Transfer by a Restricted Holder, or to a
Restricted Holder, if, in its sole discretion and judgment it determines that
the Transfer is in the best interests of the Corporation and its Stockholders.
In deciding whether to approve any proposed Transfer of capital stock by or to a
Restricted Holder, the Board of Directors may seek the advice of counsel with
respect to the Corporation's preservation of its federal income tax attributes
pursuant to Code Section 382 and may request all relevant information from the
Restricted Holder with respect to all capital stock directly or indirectly owned
by such Restricted Holder. Any Person who makes a Request of the Board of
Directors pursuant to this subsection C to Transfer shares of capital stock
shall reimburse the Corporation, on demand, for all costs and expenses incurred
by the Corporation with respect to any proposed Transfer of capital stock,
including, without limitation, the Corporation's costs and expenses incurred in
determining whether to authorize that proposed Transfer.
D. Damages. Any Restricted Holder who knowingly violates the provisions of
this Article XI, and any persons controlling, controlled by or under common
control with such a Restricted Holder, shall be jointly and severally liable to
the Corporation for, and shall indemnify and hold the Corporation harmless
against, any and all damages suffered as a result of such violation, including
but not limited to damages resulting from a reduction in or elimination of the
Corporation's ability to utilize its federal, state and local income tax
attributes under Code Section 382, and attorneys' and accountants' fees incurred
in connection with such violation.
E. Legend on Certificates. All certificates for shares of Common Stock
issued by the Corporation shall conspicuously bear the following legend:
"The Certificate of Incorporation (the "Certificate") of the
Corporation contains restrictions prohibiting the sale, transfer,
disposition, purchase or acquisition of any capital stock without the
authorization of the Board of Directors of the Corporation (the
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<PAGE>
"Board of Directors"), by or to any holder (a) who beneficially owns
directly or through attribution (as generally determined under Section 382
of the Internal Revenue Code of 1986, as amended (the "Code")) five percent
or more of the value of the then issued and outstanding shares of capital
stock of the Corporation or (b) who, upon the sale, transfer, disposition,
purchase or acquisition of any capital stock of the Corporation, would
beneficially own directly or through attribution (as generally determined
under Section 382 of the Code) five percent or more of the value of the
then issued and outstanding capital stock of the Corporation, if that sale,
transfer, disposition, purchase or acquisition would, in the sole
discretion and judgment of the Board of Directors, jeopardize the
Corporation's preservation of its federal income tax attributes pursuant to
Section 382 of the Code and is not otherwise in the best interests of the
Corporation and its stockholders. The Corporation will furnish without
charge to the holder of record of this certificate a copy of the
Certificate, containing the above-referenced restrictions on transfer of
stock, upon written request to the Corporation at its principal place of
business.
THIRD: The amendment of the Certificate of Incorporation herein certified
has been duly adopted in accordance with the provisions of Section 228 and
Section 242 of the General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, I hereunto sign my name on this 5th day of December,
2000.
By: /s/ BERNARD MANUEL
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Name: Bernard Manuel
Title: President
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SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CYGNE DESIGNS, INC.
Date: December 8, 2000 By: /s/ ROY E. GREEN
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Roy E. Green
Secretary
